> existing centralized systems

Other comments speak to this - but I wouldn't describe SWIFT (the predominant cross-border payments rail for high-value transactions that you couldn't just throw at a fintech eg. Wise) as centralized.

It's a bunch of hops, across correspondent (but separate) banks, that slow payments down, make them expensive + inconsistently traceable + introduce a bunch of manual ops burden along the way across each of the banks in the chain.

At the very least, assuming you're correct the current slow infrastructure is by design, it seems good there are options.

A business can choose if they want

1. slow, pay for customer support and fraud protection

2. instant, lower cost, mistakes are irreversible

In these matters, I always try to keep in mind that technologies aren't themselves disruptive; customer choices are. It'll be interesting to see what customers choose in the years to come.

> Once again - this is a feature not a bug

Are you really "once again"ing Patrick Collison on the issue of how payments work?

This isn't a consumer payments system. Certainly there are use-cases where fraud and abuse aren't very relevant. A network of larger businesses could find value in expediting transactions but they are all long-term players and can't afford to defraud each other. The system could make it impossible to hide such activity, and recovery through the courts is always possible because there is an entity with assets involved in a business transaction.

> What is to stop centralized blockchains from incremently increasing fees to the level of CCs over time?

Then users will just go to a different chain that provides a better outcome.

The most important aspect of blockchain that is relevant here is that your counterparty half a world away and you both agree that you trust the state of this blockchain, and thus can transact on it.

For business running the same code on their 1 node instead of N is not a replacement, because their counterparty has no reason to trust whatever is running on that 1 node.

Your reasoning re: N nodes are expensive is also flawed. Executing a single payment transaction takes a fraction of a second of compute. Even if it is replicated 10,000X, it's still extremely cheap compute-wise. The low cost of transactions has nothing to do with subsidizing.

I don't like Blockchains mostly but the technology of the Blockchain here is not irrelevant, it is a way to use peer to peer liquidity. That is there is no need for a central entity to have liquidity in many different circuits because you can trade with other coin holders directly in many different exchanges.

Sort of like banks use customer money to offer loans to avoid the need of centralised liquidity.

The Blockchain technology is important to allow different exchanges to interact with each other in ways that I suspect would be not super legal through a central entity.

Is this just for dilution of responsibility? If a central company is responsible for these transactions, then they are responsible for the transactions, which means there are all kinds of legal constraints and repercussions. But if it's a blockchain, then all of the nodes in the network are responsible.

So in this case, "this business is incentivized to be honest" might be the precise "problem" this is meant to solve.

This makes sense as long as

> This business is incentivized to be honest because otherwise they lose their business

is true. And it might be true if you assume perfect competition, low barriers to entry, no egregious regulations, no regulatory capture, no bundling to force decisions regardless of 'honesty' (or 'fairness'), etc.

So in a perfect world, maybe. But I think the niche in all the imperfections.

You are missing the "trust" element of a blockchain. A blockchain essentially allows you to run a distributed database where the different actors don't trust one another. Tradfi is built on trust of entities (can I trust this bank? Can I trust this central bank? Etc.)

> Criptography

You mean criptography and trust right?

> If something can be accomplished on the blockchain, which requires N nodes, a business can probably replicate that same objective with less than N nodes because they don't have to pay the cost of verifying that nodes are acting honestly. This business is incentivized to be honest because otherwise they lose their business.

This is missing something important, which we can see by considering one of the major problems merchants want to solve right now.

The credit card companies charge them ~3% and then give ~1% back to the customer, implying that there is a ~2% net gain to be had by cutting out the middle man. So why hasn't this happened? Because the alternative with the lower fees is ACH, but customers are less willing to give out their bank account number than their credit card number to a random small business.

This is the easy case for some centralized service to fix it, right? Have some large trustworthy company take the customer's bank account info and transfer the money to the merchant for a very small processing fee. But this is the part where your assumption falls through. Once the merchant has signed up for this, the payment processor is the only one with the customer's payment info. In other words, it's hard to switch, and then the payment processor can charge higher fees (eroding the benefit) and the high switching costs also cause the market to consolidate. And because you're tied to a single payment processor, when their fraud AI has a false positive they can erase your business overnight by locking you out and not answering the phone.

Now suppose you don't have a centralized system. Instead, the customer acquires a store of value (Bitcoin, stablecoin, something else) however they want. Customer A can get it from Coinbase, Customer B can get it from Stripe, Customer C can get it by selling something on eBay and accepting it as payment, and the merchant doesn't have to do business with any of these third parties to accept payments from customers who do, because they all support the same transfer medium.

Now you have a competitive market. Currently a new payment processor has to earn the trust of a large enough percentage of the general public for merchants to be willing to use them; a new exchange would only need the trust of enough people to be doing enough business to cover their costs, a far lower threshold. If a merchant wants to switch payment processors or has a dispute with one of them, their own customers wouldn't have to do anything different because the means customers use to convert dollars to tokens is independent of the means merchants use to convert tokens to dollars.

> Someone has to pay those costs for the N nodes on the blockchain - who will it be?

That's the boring question. The interesting question is, can you have a blockchain with lower fees than payment processors currently have? And the answer appears to be yes, e.g. the transaction fee for Bitcoin Cash is around a penny.

I’m as cynical about crypto as any sane person but I think you’re hand-waving away the challenges of international business. How can you transact in dollars if you’re a business in Argentina? As you say, if you’re operating in Europe, this is a solved problem, but lots of businesses are operating across borders that don’t have the same payment options. Banks could solve this problem but they haven’t and this is what non-banks have come up with. I’m sure if SEPA was global this wouldn’t be necessary, but it isn’t.

Australia too has instant and fee free transfers, so American staples like venmo just simply don’t exist here. People just send money to and from each other’s banks directly instantly and for free. So why would we need another service?

Crypto here would similarly make very little sense.

> It might be a good fit there but trading in dollars would've fixed that too.

You are underestimating how toxic the Argentinian government was.

We did do that with capital controls, the problem is that it was illegal, and the Argentinian IRS is very active trying to tear you a new one. Argentina has long become a bimonetary economy, dealing with ARS for everyday transactions, but saving in USD and pricing assets in USD (real state for example).

To give an example where this would have helped, my parents in Argentina needed to send money to my brother in Europe. The government had made that illegal with capital controls, so I had to transfer him money through wise from a 3rd country and when at some point later I visited they gave me the cash.

People underestimate how annoying and distopic governments can be if given the chance.

That is because the EU acts as a coordinating authority, if you wanted to transfer money from Greece to Iran it would be a different issue.

I suspect that banks cannot solve this because it would be illegal for them to do so.

If many banks could send and receive money from across the world money laundering would become way way easier (in this sense the lack of privacy in many blockchains can be seen as a strength) and it is how offshore fiscal paradises work

>in Europe you can wire money across borders for free

do you mean "electronic funds transfer"? because "wiring" is an old school thing that uses Telex machines and and gets processed by people and I would doubt it carries no fee. (It's probably been modernised so that people handle virtual slips of paper, but it very much carries the feel of an "order on a slip of paper" type of transaction and is far from instantaneous.)

I'm genuinely asking, I only know about the US systems where electronic funds transfer is known as ACH which is an automated clearing house, and wiring is called wiring. From the US, I can wire to European banks. I can't ACH.

I think the argentinian case was mentioned for marketing purposes. You can trade using the USD dollar which at the end of the day is probably what your client/provider is using anyway.

> Surely a large and legitimate operation like Stripe and the companies they mention in the blog post would have found additional use cases?

You are literally in a thread whose top post is the Stripe founder describing use cases.

> So transactions are difficult because they are illegal, and blockchain helps to facilitate crime?

Let's say I make drinking water illegal, would you still do it? Sure you would, you need it to live, laws be damned.

In Argentina it was a similar situation, financially speaking, but with USD, as Argentina had like 1000% accumulated inflation since 2019, so basically the ARS melted in your hands, and the USD/Euros/crypto where your only safe havens.

So yes, the government made the transactions illegal, but the alternative was becoming poor (we ended up the previous government with around 55% poverty).

In this case, Stripe is adding themselves as a middleman.

Whether or not it was the point of Bitcoin from the start, "removing the middlemen" is bullshit because you still need exchanges, wallet providers, people running nodes, etc. Cryptocurrency in practice just transfers power from traditional middlemen to new technically-advantaged middlemen.

I'm not sure there's much of a distinction; the reason there are so many middlemen is regulatory.

Let's check how people use credit cards and buy-now-pay-layer schemes (Klarna & co) responsibly in America.

It clearly demonstrates that people do not have the capacity to make critical judgments and have to be somewhat protected from themselves.

That's als what regulations are for.

The frequency with which people involved in cryptocurrency "pull the levers themselves" has far outpaced government manipulation of currency.

> removing the levers of power from world governments

A lever of power is never removed unless the act itself can no longer be performed. All you can do is take someone's hand off the lever and hope that whoever grabs it next is better than the last hand that had it.

I find it very unlikely that wresting power away from government—which at least has some level of citizen participation—will end up with it in better hands. The most likely scenario is that some billionaire will end up owning it.

  appears to be regulatory differences in how the blockchain is regulated versus traditional ledgers.

Why does it need to be achieved using traditional technology? Crypto works, and has attracted billions in liquidity for stable coins

You do understand that a blockchain is just a hashed ledger? It's called "crypto" because they use cryptography principles to hash the ledger into multiple parts.

But it's still just a ledger.

With blockchain, you just get a ledger that's harder to use and dependent on external connectivity.

> Also a weird thing to call a "feature" for developers when this actively drives away potential users.

while being a funnel of 1 step for the users already in the ecosystem that find your application

the ecosystems turns the entire Web 2.0 marketing funnel industry on its head because the initial call to action is a payment. All of the mystery of converting to a paying customer is obsoleted in favor of unbridled commerce

this just points out another way its optimal for developers with ideas, when aiming for revenue in a web3 architected project for crypto natives. they have frictions, you solve them, they pay you. If you aren’t catering to crypto natives already, don’t launch a web3 application. the space is already big enough to ignore other potential users, and if you want that to be your cause to help the UX to grow the space, you can do that too.

> security bugs using Solidity

To your other point, I don't see 2016's smart contract coding problems as show stopping criticisms, because this is the lowest hanging fruit of experience for anyone learning solidity, all while standardization of open source methods has solved those building blocks just like in other languages. additionally, you can write an insecure application in the web 2.0 space as well.

There are enough and a growing number of developers that aren't afraid of deploying code on a blockchain. a lot has happened in the last ... decade? developer tooling has improved.

yes, the developer experience is better on a platform where you can write code (potentially with bugs) than a platform where you can’t write code or do anything programmatic at all.

and yet, when you look at what comprises a stablecoin alongside the frictions unstable foreign countries have, you'll see why they occur on EVMs and not some other architecture

> The API could be cobol and it wouldn’t matter

you can probably get cobol to transpile to bytecode that EVMs can use. I get the point you're trying to make that excludes blockchains, but you don't make that point